Wobbly risk sentiment as the week closes
Friday 19 March 2021
We're ending the week with some fragile market tones amid a wobble on oil prices which sent some jitters through other markets too. A bit steadier this morning but fragile tones still.
The BOJ duly confirmed they will increase its JGB yield trading band from 0.2% to 0.25% and drop the JPY 6trln ETF buy target.No surprises so we've duly seen USDJPY retreat back to 108.60 after yesterday's rumour led rally from there to 109.20-30. In essence the news was factored in yesterday therefore.
The BOE duly sprang no surprises either as per my follow up email but, like the Fed, was not quite as hawkish asd some bulls were hoping for and we've seen a cap in GBP but still ranging overall. Meanwhile another lockdown in Paris and 15 other French regions has helped put the skids under the Euro again.
The FX jury remains out still so we need to focus on price action and value for money in our entry and exit levels. Discipline and patience needed more than ever in these ever fickle/fragile times.
GBPUSD had a look below 1.3900 but found support from option contract expiries down there after capping above 1.3980 prior to the BOE snd now back to 1.3950 again.EURGBP found support at 0.8530-35 again before bouncing to 0.8575 as GBP retreated post-BOE but the move was soon faded again and now testing 0.8540 again with EUR wobbles returning.GBPJPY once again failed at 152.50 with rally sellers on core pairs both poised still and softer risk sentiment.USDJPY retreat post-BOJ is helping to push GBPJPY lower to 151.40 this morning.
I remain poised to sell GBP into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range at these lower levels. Patience, entry/exit level and not getting greedy remain key.
USDJPY duly capped around 109.30 again as rally sellers prevailed on the back of the BOJ rumour-led rally and now back down to 108.60 again. Still ranging overall. EURJPY indeed struggled to hold gains yesterday and found a cap at 130.20 to test 129.40-50 support this morning as core pairs duly found rally sellers. EURUSD has seen EUR wobbles return across the board as much of France goes into lockdown and some ongoing US-EU bond yield divergence and pushed this pair back down to look at 1.1900 as i type. USDCHF duly rallied from 0.9220 where I highlighted a decent line yesterday with the SNB ever watchful and EURUSD retreating again but failing above 0.9300.
AUDUSD duly found a decent base at 0.7760 ahead of those large 0.7750-55 and AUDNZD 1.0770-75 expiries as per my tweets. Further pressure after capping at 0.7800 since has seen another drop to look at the good support at 0.7725 again before boucing to 0.7750.USDCAD found support at 1.2400 this time and made steady progress up to 1.2520 as oil prices fell and amid the generally firmer USD tones. Support now coming in at 1.2460 after the retreat as oil bounced.
Southend take on Scunthorpe tomorrow in what is sadly now another must-win game. They all are from here... Fingers and toes crossed.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.50 GMT